Annual Revenue of Unlawful Gaming Shadows Tax Income of State Governments by $15.3 billion
In the United States, the issue of illegal gambling continues to be a significant concern, with an estimated $673bn in total expenditure on gambling not going through legal operators. According to the American Gaming Association (AGA), this unregulated market is primarily composed of sports betting through offshore websites or illegal bookies, unlicensed online casinos offering slots and table games, and unregulated gaming machines in bars and convenience stores.
The AGA's latest report, compiled in 2022, reveals that the illegal gambling market has expanded by 22% since the last report. To combat this growth, authorities have implemented several legal and regulatory measures focused on sports betting, online casinos, and unregulated gaming machines.
One key recent measure is the State Legislative Actions and Lawsuits. In California, Senate Bill 549, also known as the "Gaming: Tribal Nations Access to Justice Act," was signed in 2024. This bill empowers tribal governments to sue state-licensed card clubs and third-party service providers that operate illegal house-banked games such as blackjack and baccarat. This approach directly targets illegal card games orchestrated outside tribal jurisdiction.
Another significant effort is the State-Level Legalization and Regulation Efforts. Many states are actively adjusting laws to legalize and regulate sports betting and online gambling to capture tax revenues and provide safer environments for players. For instance, Georgia is considering constitutional amendments and bills to legalize casinos and sports betting by mid-2025, which could also shrink illegal markets by introducing regulated opportunities.
The US gambling regulatory landscape remains complex, with federal laws such as the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 aimed at curbing illegal internet gambling, but enforcement and legalization primarily fall under state jurisdiction. The absence of a uniform federal regulation means states continually pass laws to combat illegal gambling within their borders, adapt regulations, and introduce licensing and compliance requirements for online and retail gambling activities.
Authorities also emphasize responsible gaming by providing resources, expanding helplines, and implementing tax and licensing regimes that incentivize legal operations and penalize unregulated gaming machines and offshore gambling sites.
Bill Miller, the AGA President and CEO, stated that "bad actors operate in the shadows with zero consumer protections, no responsible gaming obligations, and no economic return to the communities they exploit." Miller called for stronger enforcement in the US to combat illegal operators and work with international partners to block offshore platforms and hold them accountable.
The American Gaming Association recently commissioned new research, conducted by The Innovation Group, which shows that the unregulated gaming machines around the country generate an estimated revenue of $30bn each year, while illegal iGaming generates $18.6bn and unlicensed sports betting $5bn. This means a loss of revenue for licensed companies of almost $54bn.
In summary, US authorities combat illegal gambling growth through state-level legislation enabling legal market creation, empowering tribal nations to enforce exclusive gaming rights by legal action, and overseeing licensing regimes combined with federal laws that target unlawful internet gambling transactions. These measures aim to reduce illegal activities particularly in sports betting, online casinos, and unregulated machines by offering regulated alternatives and enforcing jurisdictional rights.
